Martin Galstyan: In the age of knowledge-based economy, the mission of banks is not only to finance, but also to help businesses enhance their competitiveness

ArmInfo. In the age of a knowledge-based economy, the mission of banks is not only to finance, but also to enhance knowledge about business process management methods.  Chairman of the Central Bank Martin Galstyan expressed this opinion to journalists on the sidelines of the Union of Banks of Armenia forum "Opportunities and Prospects for Financing Small and Medium Businesses", which was held at the Voskevaz winery in Aragatsotn region. During the event, success stories of entrepreneurs who took advantage of the SME support program of the German-Armenian Fund (GAF) were presented. The head of the Central Bank noted that banks, having an extensive knowledge base in technology and digitalization, auditing and accounting, should help businesses become more competitive. According to Galstyan, the program implemented by GAF will help SMEs develop knowledge-intensive strategies and be viable, as this segment plays a crucial role in driving the economy.

Head of the GAF Audit Department, Arsen Eghikyan, said during the event that the Fund was founded in 1998 based on a signed intergovernmental agreement between Armenia and Germany to develop the Armenia's financial system, introduce new credit technologies, develop skills in the financial system, and enhance the attractiveness of several sectors of the economy. He noted that by the end of 2024, GAF's loan portfolio had reached 174 billion drams (about $440 million), with 13 thousand loans  issued. Since its inception, the portfolio has reached 980 billion drams ($2.5 billion), or about 130 thousand loans.  Specifically for the Aragatsotn region, where the event was held, Yeghikyan noted that the region's share in the portfolio is 9%. Additionally, GAF's activities have created 162 thousand new jobs in Armenia.

"The initial funding came from  Germany (German Development Bank KfW), and with increased trust and performance, donors such as the World Bank, Asian Development Bank, and European Investment Bank joined the program. Our programs focus on developing SMEs, stimulating renewable energy sources, agriculture, and housing construction," Yeghikyan said. GAF currently cooperates with 16 Armenian banks and 12 credit companies.

Summarizing the results, Daniel Azatyan, the head of the Union of Armenian Banks (UBA), emphasized that the primary purpose of the event is to bring together representatives from the business and financial sectors on one platform to discuss successful cases and concern of SMEs. Azatyan also noted that financial accessibility remains the main challenge for businesses. He pointed out that the credit investments in the SME sector, totaling 1.6 trillion drams ($4.1 billion) at the end of 2024  is a good indicator, and the larger it grows, the more everyone will benefit from it.